What amount of non-refundable franchise fees did City Publications recognize in 2023?
City_Publications Franchise · 2025 FDDAnswer from 2025 FDD Document
l recently issued Accounting Standards Updates ("ASU"). The adoption of the recently issued ASUs, including those not yet effective, is not anticipated to have a material effect on the financial position or results of operations of the Company.
NOTE 2 – CONTRACTS WITH CUSTOMERS
The Company has recorded a liability for unearned revenue associated with the performance obligation of the Company's franchise agreements. The account bala
Source: Item 23 — RECEIPT (FDD pages 39–129)
What This Means (2025 FDD)
According to City Publications' 2025 Franchise Disclosure Document, the company recognized $22,373 in non-refundable franchise fees during the year ending December 31, 2023. This figure reflects the portion of deferred franchise fees that City Publications recognized as revenue during that specific year. These fees are initially deferred, meaning they are not immediately recognized as income, but are instead recognized over a period of time as the franchisor fulfills its obligations to the franchisee.
For a prospective City Publications franchisee, this information provides insight into the financial accounting practices of the franchisor. The recognition of non-refundable franchise fees indicates how City Publications accounts for its initial franchise fees over time. The initial franchise fee is a one-time, upfront payment that franchisees typically make to the franchisor for the right to operate under the brand.
The deferred revenue accounting method is a common practice in the franchise industry, as it aligns revenue recognition with the delivery of services and support to franchisees. Monitoring the changes in deferred revenue can provide insight into the company's financial health and stability. Understanding these accounting practices can help a potential franchisee assess the financial stability and reporting transparency of City Publications.